Organizational Diagnostic Models: A Review & Synthesis

HR Intelligence Report
Organizational Diagnostic Models

A Review & Synthesis

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Introduction
The purpose of this review is to examine several organizational diagnostic models which have
been conceptualized in the research literature, including the Organizational Intelligence Model
(Falletta, 2008). In order to understand these models, a brief explanation of organizational
diagnosis is warranted. Lastly, causal modeling procedures such as path analysis and structural
equations modeling are examined in this review as techniques for assessing the validity of
organizational models.
The Notion of Organizational Diagnosis

Many organization development (OD) strategies exist for improving an organizations
effectiveness (Beer & Spector, 1993; Cummings & Worley, 1993; Rothwell & Sredl, 1992). One
of these strategies, organizational diagnosis, involves diagnosing, or assessing, an
organizations current level of functioning in order to design appropriate change interventions.
The concept of diagnosis in organization development is used in a manner similar to the
medical model. For example, the physician conducts tests, collects vital information on the
human system, and evaluates this information to prescribe a course of treatment. Likewise, the
organizational diagnostician uses specialized procedures to collect vital information about the
organization, to analyze this information, and to design appropriate organizational
interventions (Tichy, Hornstein, & Nisberg, 1977).

Like the physician, the organizational diagnostician views the organization as a total system. In
the field of medicine, this is considered to be holistic medicine, while in the field of
organization development, the total system view is considered to represent open systems
theory (Katz & Kahn, 1978). That is, an organization can be viewed as a total system with
inputs, throughputs, and outputs, connected by feedback loops. The feedback loops illustrate
the idea that systems are affected by outputs (e.g., products and services), as well as its inputs.
The open systems view will be explained further in a later section of this review.

Like the patient visiting the physician, the process of collecting data during organizational
diagnosis can serve to motivate organizational members to learn about and participate in the
change process (or the intervention in the medical scenario). The diagnosis, either medical or
organizational, usually confirms that a problem actually exists. Within an organization, the
diagnostic process often facilitates an admission by top management that the organization
does indeed have problems or needs that should be addressed (Argyris, 1970; Harrison, 1987;
Manzini, 1988). Further, a variety of data collection techniques and/or procedures are often
used to rule out presenting problems and to search for the underlying problems (Fordyce &
Weil, 1983; Kolb & Frohman, 1970; Porras & Berg, 1978). Finally, within the organizational
diagnostic process, the results of the data collection are fed back to organizational members
within the organization in order to begin the process of organizational change (Burke, Coruzzi,
& Church in Kraut, 1996; French & Bell, 1995; Harrison, 1987).
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In viewing organizations as systems, organizational diagnosticians direct their attention to
those activities and processes within the system that are considered to be vital to
organizational life. However, the scope of a diagnosis may be either narrow and symptomatic
or broad and systematic. For example, a narrow and symptomatic diagnosis involves a very
quick scan of the organization, focusing on trouble spots (Tichy, 1983). The problem with this
type of diagnosis is that, all too often, the problem keeps reoccurring. Therefore, it is
important to systematically examine the entire system when conducting organizational
diagnosis, rather than focusing on rapid diagnoses and quick fixes (French & Bell, 1995). The
use of organizational models, to be discussed in the next section, facilitates the systematic
diagnosis of organizations.
Uses of Organizational Models

An organizational model is a representation of an organization that helps us to understand
more clearly and quickly what we are observing in organizations. Burke explains the many ways
in which organizational models are useful (in Howard and Associates, 1994):

1. Models help to enhance our understanding of organizational behavior.
2. Models help to categorize data about an organization.
3. Models help to interpret data about an organization.
4. Models help to provide a common, short-hand language.
The model provides a systematic way to collect data on the organization and to understand
and categorize the data. Models often identify vital organizational variables which are
hypothesized to exist based on prior research. Models also depict the nature of the
relationships between these key variables (e.g, one organizational variable impacts another).
Without a model to guide the collection of data and to interpret the data, a diagnostician must
instead collect data based on hunches and analyze it for themes. While many practitioners
have intuitive models in their minds, an explicit model greatly aids the diagnostic process, given
the complexity of organizations and the massive amount of information available for analysis.

Burke does warn organizational diagnosticians about rigidly adhering to one model, despite
evidence that the model may be appropriate for the organization (in Howard, 1994). He
suggests that is possible to become trapped by ones chosen model. For example, if one
particular viewpoint drives the diagnostic process, a consultant can easily miss important issues
in the organization (pp. 55-56). In other words, the organizational diagnostician may frame
the data collection procedures based on the limited variables in the model, thereby failing to
collect important information on other possible variables.

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Descriptions of Organizational Diagnostic Models

The models are presented in the chronological order in which they first appeared in the
literature. The models reviewed in this section include:

1. Force Field Analysis (1951)
2. Leavitts Model (1965)
3. Likert System Analysis (1967)
4. Open Systems Theory (1966)
5. Weisbords Six-Box Model (1976)
6. Congruence Model for Organization Analysis (1977)
7. McKinsey 7S Framework (1981-82)
8. Tichys Technical Political Cultural (TPC) Framework (1983)
9. High-Performance Programming (1984)
10. Diagnosing Individual and Group Behavior (1987)
11. Burke-Litwin Model of Organizational Performance & Change (1992)
12. Fallettas Organizational Intelligence Model (2008)

Force Field Analysis

In 1951, Kurt Lewin developed a model for analyzing and managing organizational problems
which he has termed Force Field Analysis (French & Bell, 1995; Fuqua & Kurpius, 1993; Lewin,
1951). This model is relatively simple to understand and easy to visualize. A depiction of the
model (see Figure 1) identifies both driving forces and restraining forces within an organization.
These driving forces, such as environmental factors, push for change within the organization
while the restraining forces, such as organizational factors (e.g., limited resources or poor
morale), act as barriers to change. To understand the problem within the organization, the
driving forces and restraining forces are first identified and, hence, defined. Goals and
strategies for moving the equilibrium of the organization toward the desired direction can then
be planned.

The model relies upon the change process, with the social implications built into the model
(e.g., disequilibrium is expected to occur until equilibrium is reestablished). The general goal of
this model is to intentionally move to a desirable state of equilibrium by adding driving forces,
where important, and eliminating restraining forces, where appropriate. These changes are
thought to occur simultaneously within the dynamic organization.
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Figure 1
Force Field Analysis

Current
State of
Affairs
(Problem)
Driving
Forces
Restraining
Forces
Desired
State of
Affairs
(Goal)
Disequilibrium
During Change
Equilibrium
Reestablished
Equilibrium
Interrupted

Leavitts Model

Sometime after Lewin conceptualized Force Field Analysis (i.e., fourteen years later, in 1965),
Leavitt designed another relatively simple model. This model does specify particular variables
within organizations, rather than driving forces; these variables include: task variables,
structure variables, technological variables, and human variables (Burke, in Howard, 1994;
Leavitt, 1965) (see Figure 2).
Figure 2
Leavitts Model
Structure
Task Technology
People/Actors

The structure variable refers to the authority systems, communication systems, and work flow
within the organization. The technological variable includes all the equipment and machinery
required for the task variable; the task variable refers to all the tasks and subtasks involved in
providing products and services. Finally, the human variable refers to those who carry out the
tasks associated with organizational goals (i.e., products and services). The diamond shaped
arrows in the model emphasize the interdependence among the four variables. Leavitt has
postulated that a change in one variable will affect the other variables. For example, with a
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planned change in one variable (e.g., the introduction of advanced technology), one or more
variables will be impacted. Such interventions are typically designed to affect the task variable
(e.g., to affect positive changes in products or services). In this example, the other variables
would also likely change, as morale (i.e., people) might increase and communication (i.e.,
structure) might be improved due to the new technology.

Although Leavitt describes the variables within his model as dynamic and interdependent, the
model is too simple to make any direct causal statements regarding the four variables. Similar
to the Force Field Analysis model, Leavitt suggests that a change in one variable may result in
compensatory or retaliatory change in the other variables; this notion is similar to the opposing
forces in Lewins model. However, unlike Force Field Analysis, Leavitt does not address the role
of the external environment in bringing about change in any of the variables.
Likert System Analysis

The organizational dimensions Likert addresses in his framework include motivation,
communication, interaction, decision making, goal setting, control, and performance (Likert,
1967). While Likert did not use an illustration to depict his framework, like the earlier models
reviewed, he describes four different types of management systems within organizations,
which take into account the organizational dimensions he identifies (see Figure 3).

Figure 3
Likerts Framework

System 1: Exploitative-Authoritative
System 2: Benevolent-Authoritative
System 3: Consultative
System 4: Participative Group

In order to determine the management system operating in any given organization, Likert
developed a 43-item survey instrument with questions related to the seven organizational
dimensions. The purpose of the instrument was to measure employees perceptions (upper
management, supervisors, and staff) of the organizational dimensions within the organization.
For example, one of the questions assessing communication is as follows in Figure 4.

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Figure 4
Item Example from Likerts Instrument

Extent to which
supervisors
willingly share
information with
subordinates:
Provides
minimum
information
Gives
subordinates
only
information
superior feels
they need
Gives
information
needed and
answers
most
questions
Seeks to give
subordinates
all relevant
information
and all
information
they want

Notice that Likerts original scale did not have standardized scale labels such as strongly
agree, agree, neither agree nor disagree, disagree, and strongly disagree. Instead,
Likert provided customized scale labels for each question stem (i.e., for all 43 items). The first
response alternative, in this case provides minimum information, represents Likerts System
1: Exploitative-Authoritative. The second response alternative, gives subordinates only
information superior feels they need, represents System 2: Benevolent-Authoritative, and so
forth. To determine the perceived functioning of the organization, the responses of various
employee groups are averaged across items and dimensions. A profile is graphically plotted,
indicating the current management system level for each of Likerts seven dimensions.

The terminology and system devised by Likert have been adapted and/or changed by other
researchers over the years. For example, Nelson and Burns (1984) have introduced a version of
Likerts framework with the following terminology: the reactive organization (System 1), the
responsive organization (System 2), the proactive organization (System 3), and the high-
performing organization (System 4). These changes have been made to reflect more modern
terminology and contemporary theory. Nelson and Burns High-Performance Programming
framework will be discussed in greater detail in a subsequent section of this review.
Open Systems Theory

Many of the organizational diagnostic models to be discussed rely upon the abstract notion of
open systems theory as a basic assumption, thus, warranting a brief discussion of open systems
theory. The premise of the theory is that organizations are social systems which are dependent
upon the environment in which they exist for inputs (Katz & Kahn, 1978). Open systems theory
allows for repeated cycles of input, transformation (i.e., throughputs), output, and renewed
input within organizations. A feedback loop connects organizational outputs with renewed
inputs (see Figure 5).
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Figure 5

Open Systems Theory
Input
Output
Environment
Transformati on

Traditional organizational theories have viewed organizations as closed systems which are
independent of the environment in which they exist (Katz & Kahn, 1978). In the organizational
models reviewed in this paper thus far, there is an overemphasis on variables within the
organization and an absence of any feedback from the environment.
Weisbords Six-Box Model

Weisbord (1976) proposes six broad categories in his model of organizational life, including
purposes, structures, relationships, leadership, rewards, and helpful mechanisms. The
purposes of an organization are the organizations mission and goals. Weisbord refers to
structure as the way in which the organization is organized; this may be by function where
specialists work together or by product, program, or project where multi-skilled teams work
together. The ways in which people and units interact is termed relationships. Also included in
the box of relationships is the way in which people interact with technology in their work.
Rewards are the intrinsic and extrinsic rewards people associate with their work. The
leadership box refers to typical leadership tasks, including the balance between the other
boxes. Finally, the helping mechanisms are the planning, controlling, budgeting, and
information systems that serve to meet organizational goals. The external environment is also
depicted in Weisbords model, although it is not represented as a box (see Figure 6).

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Figure 6

Conceptualization of Weisbords Six-Box Model

Purposes
Relationships
Helpful
Mechanisms
Structure
Rewards
Leadership
Environment
(input) (output)

Weisbord identifies as inputs the money, people, ideas, and machinery which are used to fulfill
the organizations mission. The outputs are products and services.

Two premises which are not apparent in Weisbords model are crucial to understanding the
boxes in the model. The first premise refers to formal versus informal systems. Formal systems
are those policies and procedures the organization claims to do. In contrast, informal systems
are those behaviors which actually occur. The bigger the gap between the formal and informal
systems within the organization, the less effective the organization is. The second premise
concerns the fit between the organization and the environment, that is, the discrepancy
between the existing organization and the way the organization should function to meet
external demands. Weisbord defines external demands or pressures as customers,
government, and unions.

Weisbord poses diagnostic questions for each box of his model. For example, he suggests that
OD consultants determine whether organizational members agree with and support the
organizations mission and goals within the purposes box. This question refers to his premise
regarding the nature of the formal and informal systems within the organization. A sample of
some of the questions he poses are as follows:

Purposes: Do organizational members agree with and support the
organizations mission and goals?
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Structure: Is there a fit between the purpose and the internal structure
of the organization?
Relationships: What type of relations exist between individuals,
between departments, and between individuals and the nature of their
jobs? Is their interdependence? What is the quality of relations? What
are the modes of conflict?
Rewards: What does the organization formally reward, and for what do
organizational members feel they are rewarded and punished? What
does the organization need to do to fit with the environment?
Leadership: Do leaders define purposes? Do they embody purposes in
their programs? What is the normative style of leadership?
Helpful Mechanisms: Do these mechanisms help or hinder the
accomplishment of organizational objectives?
In summary, Weisbords model focuses on internal issues within an organization primarily by
posing diagnostic questions which have to do with the fit between what is and what
should be. The questions he poses are not predicted by the model; rather, they appear to be
based on his OD practice. These questions serve to convolute the model because they do not
flow from the logic of the model. Moreover, Weisbord omits many interconnections between
the boxes of the model. Finally, Weisbord only tangentially addresses the impact of the
external environment in the model.

The Congruence Model for Organization Analysis
The Nadler-Tushman Congruence Model is a more comprehensive model, specifying inputs,
throughputs, and outputs, which is consistent with open systems theory (Katz & Kahn, 1978).
This model is very similar to Leavitts model; it also retains the formal and informal systems of
the Weisbord six-box model. The model is based on several assumptions which are common to
modern organizational diagnostic models; these assumptions are as follows:

1. Organizations are open social systems within a larger environment.
2. Organizations are dynamic entities (i.e., change is possible and occurs).
3. Organizational behavior occurs at the individual, the group, and the systems
level.
4. Interactions occur between the individual, group, and systems levels of
organizational behavior.
These assumptions have been used in some of the previous models examined, although only
implicitly.
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The inputs within the Nadler-Tushman Congruence model include such factors as the
environment, resources, history (i.e., patterns of past behavior), and organizational strategies
(see Table A). Nadler and Tushman are explicit in their conceptualization of each of the factors.
For example, they describe the resources available to the organization as human resources,
technology, capital, information, and other less tangible resources. While strategy is an input in
the model, it is the single most important input to the organization and is depicted by the
arrow from the input box to the organization.
The system components of the whole organizational transformation process are informal
organizational arrangements, task, formal organizational arrangements, and individual
components (see Table A and Figure 7). Similarly, the outputs of the model include individual,
group, and system outputs: products and services, performance, and effectiveness. While
outputs such as products and services are generally understood, specific examples of
organizational performance and effectiveness identified by Nadler and Tushman (1980) are
provided in the previous table.

Figure 7
Components of the Congruence Model

Environment
Resources
History
Task
Informal
Organization
Formal
Organizational
Arrangements
Individual
Organization
Group
Individual
Inputs Outputs
Transformation Process
strategy
feedback
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Table A
Inputs, System Components, and Outputs of the Congruence Model
Inputs
Environment Resources History Strategy
All factors, including
institutions, groups,
individuals, events, and
so on, that are outside
the organization being
analyzed, but that have
a potential impact on
that organization
Various assets to
which the
organization has
access, including
human resources,
capital, information,
and so on, as well as
less tangible
resources
(recognition in the
market, and so forth)
The patterns of past
behavior, activity,
and effectiveness
that may affect
current
organizational
functioning
The stream of
decisions about how
organizational
resources will be
configured to meet
demands,
constraints, and
opportunities within
the context of the
organizations history
System Components (i.e., throughputs)

Task

Individual
Formal Org.
Arrangements
Informal
Organization
The basic and inherent
work to be done by the
organization and its
parts
The characteristics of
individuals in the
organization
The various
structures,
processes, methods,
and so on that are
formally created to
get individuals to
perform tasks
The emerging
arrangements,
including structures,
processes,
relationships, and so
forth
Outputs (e.g., performance and effectiveness)
Individual behavior
and affect
Group and
Intergroup Behavior
System Functioning
(i.e., organizational)
Absenteeism, lateness,
turnover, levels of
satisfaction, drug usage, and
off-the-job activities which
impact performance
Intergroup conflict,
collaboration, and quality
of intergroup
communication
Attainment of desired goals of
production, return on
investment, etc.; utilization of
available resources; adaptability
to external environmental
demands
Note. Nadler & Tushman, 1980
Nadler and Tushman (1980) apply the concept of congruence to their model. They describe
congruence, or fit, as the degree to which the needs, demands, goals, objectives, and/or
structures of one component are consistent with the needs, demands, goals, objectives, and/or
structures of another component (i.e., how well pairs of components fit together). For
example, a task demands a level of skill and knowledge and likewise, the individuals available
to perform the task possess varying levels of skill and knowledge. Nadler and Tushman (1980)
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explain that the greater the skill and knowledge match between the task and the individual,
the more effective the performance will be.

The model is termed the congruence model based on the fit between the system components
(informal organization, task, formal organizational arrangements, and individual). Six paired
comparisons within the system are possible based on the four components. Nadler and
Tushman (1980) raise issues for consideration for each of these paired comparisons (see Table
B).

Through analysis of the congruence between the system parts, the whole organization is
diagnosed as displaying a relatively high or low total system congruence. The link between the
paired fits and the system outputs must also be considered. Nadler and Tushman (1980)
explain, fits, or lack of fits, between the key components have consequences in terms of
system behavior. For example, the fits and lack of fits can be related to behaviors observed in
the system such as conflict, performance, and stress.

Table B
Definitions of Congruence in the Congruence Model
Definitions of Congruence
Paired Fit Issues
Individual - Formal Organizational
Arrangements
How are individual needs met by the organizational
arrangements? Do individuals hold clear or distorted
perceptions of organizational structures? Is there a
convergence of individual and organizational goals?
Individual - Task How are individual needs met by the tasks? Do individuals
have skills and abilities to meet task demands?
Individual - Informal Organization How are individual needs met by the informal organization?
How does the informal organization make use of individual
resources consistent with informal goals?
Task - Formal Organizational
Arrangements
Are organizational arrangements adequate to meet the
demands of the task? Do organizational arrangements
motivate behavior that is consistent with demands?
Task - Informal Organization Does the informal organization structure facilitate task
performance or not? Does it hinder or help meet the
demands of the task?
Formal Organizational
Arrangements - Informal
Organization
Are the goals, rewards, and structures of the informal
organization consistent with those of the formal
organization?
Note. Nadler & Tushman, 1980
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McKinsey 7S Framework

The McKinsey 7S Framework was named after a consulting company, McKinsey and Company,
which has conducted applied research in business and industry (Pascale & Athos, 1981; Peters
& Waterman, 1982). The authors all worked as consultants at McKinsey and Company; in the
1980s, they used the model in over seventy large organizations. The McKinsey 7S Framework
was created as a recognizable and easily remembered model in business. The seven variables,
which the authors term levers, all begin with the letter S (see Figure 8).

Figure 8

Illustration of the 7S Framework
Style
Staff
Systems
Skills
Structure
Strategy
Shared
Values

The shape of the model was also designed to illustrate the interdependency of the variables;
the illustration of the model has been termed the Managerial Molecule. While the authors
thought that other variables existed within complex organizations, the variables represented in
the model were considered to be of crucial importance to managers and practitioners.

The seven variables include structure, strategy, systems, skills, style, staff, and shared values.
Structure is defined as the skeleton of the organization or the organizational chart. The authors
describes strategy as the plan or course of action in allocating resources to achieve identified
goals over time. The systems are the routinized processes and procedures followed within the
organization. Staff are described in terms of personnel categories within the organization (e.g.,
engineers), whereas the skills variable refers to the capabilities of the staff within the
organization as a whole. The way in which key managers behave in achieving organizational
goals is considered to be the style variable; this variable is thought to encompass the cultural
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style of the organization. The shared values variable, originally termed superordinate goals,
refers to the significant meanings or guiding concepts that organizational members share.

The authors have concluded that American companies tend to focus on those variables which
they feel they can change (e.g., structure, strategy, and systems) while neglecting the other
variables. These other variables (e.g., skills, style, staff, and shared values) are considered to be
soft variables. Japanese and a few excellent American companies are reportedly successful at
linking their structure, strategy, and systems with the soft variables. The authors have
concluded that a company can not merely change one or two variables to change the whole
organization. For long-term benefit, they feel that the variables should be changed to become
more congruent as a system.

The external environment is not mentioned in the McKinsey 7S Framework, although the
authors do acknowledge that other variables exist and that they depict only the most crucial
variables in the model. While alluded to in their discussion of the model, the notion of
performance or effectiveness is not made explicit in the model.
Tichys Technical Political Cultural (TPC) Framework

Similar to some of the previous models, Tichys model includes inputs, throughputs, and
outputs, which is consistent with the open systems perspective discussed earlier. Tichy
identifies key variables in the model which are important to the change management process
(Tichy, 1983). The environment and history (broadly construed) are two major categories of
input to the organization whereas resources are a third category of input. The throughput
variables, or change levers, identified in the model include mission/strategy, tasks, prescribed
networks, people, organizational processes, and emergent networks (see Figure 9).

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Figure 9

The Technical, Political, Cultural Framework

Tichys Rope
Metaphor:
Technical
Political
Cultural
strands
Legend:
Strong Impact
Weak Impact
Input
Environment-history
Resources
Mission
strategy
Tasks
People
Emergent
Networks
Organizational
processes
Prescribed
networks
Performance - Impact on people
Output

Tichy defines the mission/strategy variable as the organizations approach to carrying out its
mission and strategy and criteria for effectiveness (i.e., the organizations purpose). The tasks
variable refers to the technology by which the organizations work is accomplished. The
prescribed networks (i.e., the formal organization) have to do with the designed social
structure of the organization, such as the organization of departments and the communication
and authority networks. The people variable refers to the characteristics of organizational
members, including their background, motivation, and managerial style. The mechanisms
which enable the formal organization to carry out the work are termed the organizational
processes; these include organizational communication, decision-making, conflict
management, control, and reward systems. The final throughput variable, emergent networks,
refers to the structures and processes in the organization which emerge informally.

The focal point of Tichys model is the output variable, which he terms organizational
effectiveness. Of course, the output is dependent upon the input and throughput variables. All
of the variables, including the input and output categories, are considered to be interrelated in
the model. While some variables have a strong impact on other variables, other variables have
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a weaker, or reciprocal, relationship on other variables (as denoted by the straight and dashed
lines).

In considering the variables in the model, Tichy applies an overlay which is vital to his
theorizing. This overlay concerns the technical, political, and cultural dynamics going on within
the variables of the model (abbreviated as TPC). The TPC overlay raises four questions which
are vital to organizational diagnosis. These questions address the technical, political, and
cultural dynamics of the organization. These questions follow:

1. How well are the parts of the organization aligned with each other for
solving the organizations technical problems?
solving the organizations political problems?
solving the organizations cultural problems?
4. How well aligned are the three subsystems of the organization, the
technical, political, and cultural?

The technical dynamics are those aspects of the organization which are knowable, such as
production processes or available resources. The political dynamics are the views of dominant
groups, including bargaining by powerful organizational groups. The cultural dynamics
constitute the shared symbols and values which make up the organizational culture. As
depicted in the illustration of the model, Tichy uses a rope metaphor to emphasize the
strategic importance of the three strands (technical, political, and cultural) in the change
process. The three strands must be managed together, or realigned, for effective change.

According to Tichys model, organizational diagnosis is quite complex. An OD consultant would
begin by collecting data relevant to the four questions for each variable represented in the
model. The data may be collected by document analysis, interviews, questionnaires, and
interviews. In order to determine where alignment is needed, summary data would be
included in a matrix and analyzed for alignment and action planning.
High-Performance Programming

Nelson and Burns (1984) high-performance programming framework assesses the current
level of performance of an organization in order to plan interventions to transform the
organization into a high performing system (Fuqua & Kurpius, 1993; Nelson & Burns, 1984).
Similar to Likert System Analysis, Nelson and Burns describe four organizational systems which
are more or less effective. These systems, or frames, as Nelson and Burns call them, include the
high-performing organization (level 4), the proactive organization (level 3), the responsive
organization (level 2), and the reactive organization (level 1). Each of these levels is
conceptualized in Table C. To diagnose an organization, a survey instrument is used with
questions related to Nelson and Burns (1984) eleven dimensions or variables. These eleven
variables are time frame, focus, planning, change mode, management, structure, perspective,
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motivation, development, communication, and leadership. The following Likert-type scale is an
example of a standardized scale which can be used with each item stem on a survey (see Figure
10).

Figure 10

Example of a Likert-type scale
Strongly
Agree
5
Agree
4
Neither Agree
Nor Disagree
3
Disagree
2
Strongly
Disagree
1

Table C
Nelson and Burns High-Performance Programming

The High-Performing
Organization
Level 4
Leaders in the high-performing organization are fully invested in
empowering organizational members. There is a common focus
on organizational excellence. Communication throughout the
organization is relatively unrestrictive. The organization is in a
constant state of evolution guided by a common vision.
Organizational members prize highly their identity with the
organization, and opportunities for self actualization are
substantial.
The Proactive
Organization
Level 3
The proactive organization focuses on the future. Leadership has
become focused on developing purpose for the organization.
Members focus on the quality of their contribution to
organizational successes. The organization is actively involved in
planning and development strategies.
The Responsive
Organization
Level 2
The responsive organization is more functional, having achieved
some clarity of purpose and goals. The organization has some
capability to adapt to changing environmental circumstances.
Leaders actively coach members in the direction of organizational
goals, and some cohesion has developed among work teams.
The Reactive
Organization
Level 1
The reactive organization is one badly in need of renewal. The
organization lacks shared focus, and management is preoccupied
with assigning blame for poor outcomes. Members spend a
disproportionate amount of time avoiding aversive
consequences, and leaders spend much of their time enforcing
policies that often lack relevance to any common purpose.
Note. Nelson & Burns, 1984
19
The leadership activities associated with the four levels of performance in the high-
performance programming framework are as follows: the high-performing organization is
associated with empowering leadership, the proactive organization is associated with
purposing leadership,
the responsive organization is associated with coaching leadership, and the reactive
organization is associated with enforcing leadership. To clarify, purposing leadership
activity refers to leadership behavior which maintains an integrated, focused purpose for the
organization. The authors describe these leadership behaviors to emphasize the importance of
empowerment and support for individuals growth and development within the organization.
Diagnosing Individual and Group Behavior

Harrison (1987) has devised a model for diagnosing individual and group behavior within
organizations. This model is somewhat unique in that it focuses on outputs such as
organizational performance and quality of work life. The model represents an open systems
perspective with minimal boundaries between the organization and external environment.
However, the external environment is not represented by anything other than resources and
feedback loops, however (see Figure 11).
Figure 11
Harrisons Model for Diagnosing Individual and Group Behavior
ENVIRONMENT
E
N
V
I
R
O
N
M
E
N
T
Org.
Level
Group
Level
Individual
Level
Outputs
Group
Performance
Individual
Performance
QWL
Outcomes
Purposes, Processes, Structure,
Technology, Behavior, Culture
Group
Composition,
Structure,
Technology
Group Behavior,
Processes,
Culture
Individual
Characteristics
Individual
Attitudes, Beliefs,
Motivation
Resources
Resources
Human
Resources
Legend:
Main lines of influence
Feedback loops

The variables accounted for in the model are conceptualized at the organizational, group, and
individual levels. The organizational level of performance appears to represent a more abstract
20
level of performance, which is a function of the outputs associated with individual
performance, group performance, and quality of work life (QWL) outcomes. Harrison (1987)
notes that a divisional level of performance also exists in reality, although he did not include it
in the model for the sake of simplicity.
The variables represented in Harrisons (1987) model are those he feels are most important to
performance and QWL. The variables which affect individual performance and QWL outcomes
are individual characteristics and individual attitudes, beliefs, and motivation (see Table D for
descriptions of these variables).

Table D
Individual and Group Levels in Harrisons Model
Key Factors Affecting Performance and Quality of Work Life (QWL)
Individual Level
Individual
Characteristics
Physical and mental state, social background and traits, training and
education, individual needs
Individual Attitudes,
Beliefs, Motivation
Motivation, rewards experienced, job felt to be intrinsically rewarding,
expectations, equity, trust, specific attitudes (e.g., satisfaction with
current procedures, attitudes toward proposed changes)
Group Level
Group Composition,
Structure, and
Technology
Social and occupational composition, structure (e.g., nature and
extent of rules and work procedures, flexibility, clarity of task
assignments, responsibilities), technology (e.g., impact of work
procedures and physical arrangements, types of workflow
interdependencies)
Group Behavior,
Processes, and Culture
Relationships among group members (e.g., cohesiveness, feelings of
attachment to group, similarity of views), processes (e.g.,
communication, cooperation and conflict, decision making, problem
solving), supervisory behavior, culture
Note. Harrison, 1987
In contrast, the variables which influence group performance are the group composition,
structure, and technology of the organization, and the group behavior, processes, and culture.
Notice that these variables are very broad.

The inputs to the model are the resources, including human resources, which are available to
the organization and feedback loops from prior organizational outcomes. Since there is no
definitive boundary around the organization, it is not clear whether all the resources are
derived from the external environment, the organization itself, or a combination of the two.
The outputs at the organizational level are the products and services the organization
produces. The outcomes associated with group performance within the organization are the
21
solutions, plans, and tactics devised during operations. At the individual level, outcomes
include the quality of individual members work efforts, their initiative, cooperation with
others, and commitment to their work; negative outcomes are related to absenteeism and
tardiness at the individual level. Lastly, perceptions of job security, working conditions, the
meaningfulness and challenge of work, and the degree to which work contributes to the
psychological well-being of members are all related to QWL Outcomes.

Harrison denotes the lines of influence in the model as either main lines of influence or
feedback loops. However, not all of these relationships are reciprocal, as some of the other
models have suggested. The extensive number of lines of influence and feedback loops in the
model makes it difficult to determine the relationships among variables (i.e., most lines of
influence are directional, and only one is bi-directional or reciprocal).

22
Summary

As is evident from the description of the various models, there are similarities and differences
in the ways in which variables are represented in the organizational models. On the one hand,
key variables are relatively broad and undefined in some models (e.g., Force Field Analysis
model). In other models, the variables represent numerous clearly defined theoretical
constructs (e.g., the Congruence Model for Organizational Analysis and Tichys TPC
Framework). Some of the same constructs are represented across models, although they are
termed differently. Table E identifies the variables represented in each model as well other
characteristics of the models.

Table E: Summary of Reviewed Models

Model

Variables
Variable
Interdependency
External
environment

Major Premise(s)
Force Field
Analysis
(1951)
Driving forces,
restraining forces
Driving and
restraining forces
occur
simultaneously
Either force
may be due
to
environmenta
l drives or
restraints
Disequilibrium
occurs during
change; equilibrium
is re-established
Leavitts
Model (1965)
Task, structure,
technological, &
human variables
The four variables
are
interdependent (a
change in one
affects the
others)
Not
represented
in the model
Change in the
variables is
undertaken to
affect the task
variable (products
& services)
Likert System
Analysis
(1967)
Motivation,
communication,
interaction,
decision-making,
goal setting,
control,
performance
The levels of
variables are
measured
independently on
a survey
Not directly
represented
in the model
Four different types
of management
systems are
identified based on
the seven variables:
participative,
consultative,
benevolent-
authoritative, &
exploitative-
authoritative
23
Table E (continued)
Summary of Reviewed Models

Model

Variables
Variable
Interdependency
External
environment

Major Premise(s)
Weisbords
Six-Box
Model (1976)
Purposes,
structure,
relationships,
leadership,
rewards, & helpful
mechanisms
The
interconnections
between the
boxes, or
variables, are not
explicit
The
environment
has an
influence
through org.
inputs and
outputs; the
fit between
the org. and
environment
is considered
also
The larger the gap
between the formal
and informal
systems within
each variable, the
less effective the
org.
Congruence
Model for
Organization
Analysis
(1977)
Inputs:
environment,
resources, history,
strategy;
throughputs: task,
individual, formal
org. arrangements,
informal org.;
outputs: individual,
group, and system
Organizations are
dynamic;
interactions occur
at the individual,
group, and
systems levels
across the
internal
(throughput)
variables
The external
environment
provides
feedback
related to the
inputs and
outputs
Assumes: open
systems theory,
formal and informal
systems, the fit or
congruence
between the
internal variables
McKinsey 7S
Framework
(1981-82)
Style, Staff,
Systems, Strategy,
Structure, Skills, &
Shared Values
Variables are
interdependent;
the illustration is
termed the
managerial
molecule
Not directly
represented
in the model,
although
other non-
crucial
variables
exist
Variables must all
change to become
congruent as a
system
24
Table E (continued)

Model

Variables
Variable
Interdependency
External
environment

Major Premise(s)
Tichys TPC
Framework
(1983)
Inputs:
environment-
history, resources;
throughputs:
mission/strategy,
tasks, prescribed
networks, people,
org. processes,
emergent
networks; outputs:
performance,
impact on people
All variables are
interrelated,
although some
relationships are
stronger and
some are weaker
(reciprocal)
The
environment
is included
through org.
inputs and
outputs and
the feedback
loop
All variables are
analyzed from a
technical, political,
a cultural
perspective (the
strategic rope
metaphor)
High-
Performance
Programming
(1984)
Time frame, focus,
planning, change
mode,
management,
structure,
perspective,
motivation,
development,
communication,
leadership
The levels of
variables are
measured
independently on
a survey
Not directly
represented
in the model
Four different
levels of org.
performance are
identified based on
the eleven
variables: high-
performing,
proactive,
responsive,
reactive; these are
associated with
empowering,
purposing,
coaching, and
enforcing
leadership
behaviors
respectively
25
Table E (continued)

Model

Variables
Variable
Interdependency
External
environment

Major Premise(s)
Diagnosing
Individual
and Group
Behavior
(1987)
Inputs: resources,
human resources;
throughputs at the
org., group, and
individual levels
(lengthy titles);
outputs: group
performance,
individual
performance, QWL
outcomes
Main lines of
influence and
feedback loops;
all relationships
are directional
with the
exception of one
reciprocal
relationship
between two
variables
Minimal
boundaries
between the
organization
and external
environment
Assumes: open
systems theory;
emphasis on three
levels of
performance,
including
organizational
performance and
QWL outcomes

The nature of the relationships between the variables in the various models also differs. For
example, some relationships between variables represent direct, one-way impacts while other
relationships between variables are considered to be reciprocal (i.e., two-way). One-way (i.e.,
) or two-way arrows (i.e., ) are used in models to depict the nature of these
relationships. In many of the models, it is not explicit whether variables are merely correlated
or whether a cause and effect relationship between variables is thought to exist.

Many of the models rely upon open systems theory as a basic assumption. Additionally, most
of the models incorporated the external environments a factor in organizational functioning.
The models do differ in the factors considered vital to organizational functioning or
effectiveness (e.g., leadership is considered important in Weisbords model, whereas the
quality of work life is considered most important in Harrisons model).

Most of the models presented in this section of the review are based on OD consultants
experience and practice in working in organizational settings. While an understanding of
organizational practice is vital to conceptualizing such models, it is imperative that working
models be validated. Without validation through applied research, those using the models to
guide their organizational work cannot be sure of the soundness of the model. Therefore, it is
essential to consider the empirical foundations (i.e., theoretical underpinnings) of any model
used in OD practice, as well as the research available on the validity of the model.
Theoreticians welcome the testing and refinement of their models because research serves to
increase the knowledge base in OD and organizational behavior. In the next section of this
review, two relatively new organizational diagnostic models are examined.
26
The Burke-Litwin Causal Model

The Burke-Litwin Causal Model of Organizational Performance and Change (B-L Model) was
developed by Litwin and others (Litwin & Stringer, 1968; Tagiuri & Litwin, 1968) and later
refined by Burke in the late 1980s (Burke & Litwin, 1992). This model includes several key
features which go beyond the models discussed earlier:

includes twelve theoretical constructs (i.e., organizational variables)
distinguishes between the culture and the climate of an organization
distinguishes between transformational and transactional dynamics
specifies the nature and direction of influence of organizational
variables
is based on previous models, empirical studies, and OD practice

The twelve organizational variables in the B-L Model are external environment, mission and
strategy, leadership, organizational culture, structure, management practices, systems, work
unit climate, task requirements and individual skills, motivation, individual needs and values,
and individual and organizational performance. With the representation of the external
environment as a variable, it is evident that open systems theory underlies the B-L Model. The
external environment variable is considered to be the input to the system with the individual
and organizational performance variable representing the output (see Figure 12).
27
Figure 12
The Burke-Litwin Causal Model

The feedback loops on the right and left sides of the model go in both directions. For example,
the performance variable affects the external environment through its products and services,
and likewise, the individual and organizational performance is affected by demands from the
external environment. The remaining variables represent throughputs in open systems theory.
Descriptions of all twelve of the variables (i.e., theoretical constructs) in the B-L Model are
provided in Table F.
External
Environment
Leadership
Management
Practices
Work Group
Climate
Motivation
Performance
Mission and
Strategy
Structure
Culture
Systems
Individual Needs
and Values
F
E
E
D
B
A
C
K
F
E
E
D
B
A
C
K
Skills/Job
Match
28
Table F
Organizational Variables in the Burke-Litwin Model
Variable Conceptualization (i.e., descriptions)
External
Environment
Any outside condition or situation that influences the performance of the
organization, including marketplaces, world financial conditions, and
political/governmental circumstances
Leadership Executive behavior that provides direction and encourages others to take
needed action; includes followers perceptions of executive practices and
values and leaders role modeling
Mission and
Strategy
What top managers believe and have declared as the organizations
mission and strategy, as well as what employees believe is the central
purpose of the organization; the means by which the organization intends
to achieve its purpose over time
Culture The collection of overt and covert norms, values, and beliefs that guide
organizational behavior and that have been strongly influenced by history,
customs, and practice
Management
Practices
What managers do in the normal course of events with the human and
material resources at their disposal to carry out the organizations strategy
Structure The arrangement of functions and people into specific areas and levels of
responsibility, decision-making authority, communication, and
relationships to implement the organizations mission and strategy
Systems Standardized policies and mechanisms that are designed to facilitate work
and that primarily manifest themselves in the organizations reward and
control systems (e.g., performance appraisal, management information
systems, budget development, and human resource allocation)
Climate The collective current impressions, expectations, and feelings of the
members of local work units, which in turn affect members relations with
supervisors, with one another, and with other units
29

Variable Conceptualization (i.e., descriptions)
Motivation Aroused behavioral tendencies to move toward goals, take needed action,
and persist until satisfaction is attained (i.e., the energy generated by the
combined desires for achievement, power, affection, discovery, and other
important human values)
Skills/Job Match

The behavior required for task effectiveness, including specific skills and
knowledge required to accomplish work
Individual Needs
and Values
The specific psychological factors that provide desire and worth for
individual actions or thoughts
Performance The outcomes or results, with indicators of effort and achievement
including productivity, customer or staff satisfaction, profit, and service
quality

As is evident through the climate and culture variables, Burke and Litwin make a distinction
between organizational climate and culture. Climate is defined as individuals perceptions of
how their work unit is managed and how effectively they and their colleagues work together
(see Table K) (Burke & Litwin, 1992). People are much more cognizant of organizational climate
than culture (i.e., climate is in the foreground, whereas culture is in the background). In
contrast, culture has been defined as the relatively enduring set of values, norms, and beliefs
that underlie the social system of the workplace (Burke & Litwin, 1992). These values, norms,
and beliefs related to organizational culture are not entirely available to ones consciousness.

In addition to the distinction between culture and climate, the B-L Model distinguishes
between transformational and transactional dynamics within organizations. Burke and Litwins
(1992) consideration of transformational and transactional dynamics is rooted in leadership
theory and specifically, in the differences between leaders and managers. In the model,
transformational change is associated more with leadership, while transactional change is
associated more with management. Hence, transformational dynamics represent fundamental
changes in behaviors and values that are required for genuine change in organizational culture.
In terms of management, transactional dynamics are the everyday interactions and exchanges
in work life related to organizational climate (Burke & Litwin, 1992).

The variables in the B-L Model which account for transformational dynamics are depicted in
Figure 13; note that this is a truncated version of the model (i.e., the top half of the model with
the performance variable).
30
Figure 13
Transformational Variables in the B-L Model

External
Environment
Leadership
Performance
Mission and
Strategy
Culture

The arrows in the figure above depicts the influence of one variable on another and the
directionality of the influence. While the arrows are bi-directional (i.e., representing reciprocal
relationships), Burke and Litwin (1992) would have made the arrows circular, if it were
possible, to represent reality more accurately. Moreover, Burke and Litwin postulate causal
relationships between the variables; the notion of causal relationships has not been
hypothesized in previous models. It is asserted that a top-down causal chain exists, in which
the top variables have a greater influence on the bottom variables. For example, although
culture and systems influence one another (i.e., in a reciprocal manner), Burke and Litwin
believe that culture has a stronger influence on systems, given its placement in the hierarchy of
the model. The model, therefore, defines the important variables and the important
interactions between variables to consider during planned change interventions.

The variables in the model which account for transactional dynamics are depicted in Figure 14;
again, this illustration is a truncated version of the model (i.e., the bottom half of the model).

31
Figure 14
Transactional Variables in the B-L Model

Management
Practices
Work Group
Climate
Motivation
Performance
Structure
Systems
(Policies and
Procedures)
Skills/Job
Match
Individual Needs
and Values

As mentioned, the model has been revised over time by Burke and his colleagues in a series of
organizational studies (Bernstein & Burke, 1989). In recent publications, Burke and Litwin have
welcomed further empirical investigation of the validity of the organizational model (Burke,
Coruzzi, & Church, in Kraut, 1996; Burke, in Howard, 1994).

Theoretical Basis of the B-L Model

Research studies related to each of the organizational variables in the B-L Model are reviewed
in this section in order to understand the theoretical underpinnings of the model. It should be
noted that both theoretical and empirical articles are, for the most part, included in this
review. The empirical articles include studies employing varied research designs, including
correlational studies, case studies, and quasi-experimental designs (e.g., employing comparison
groups). Further, the variables examined in the various studies are all operationally defined
differently. Given the number of constructs (i.e., variables) in the B-L Model and the complexity
of the relationships among the constructs (e.g., direct causal relationships, moderating
relationships), a thorough critical review of all relevant empirical studies is not feasible for the
purposes of this review. However, an attempt has been made to examine the major
relationships between variables through a review of representative articles; these articles are
listed in Table G.
32
Table G
Empirical Studies Related to Constructs in the B-L Model

Variables in B-L
Model
Relationship Empirical Studies
External
Environment
Culture
Mission & Strategy
Gordon, 1985
Prescott, 1986

Leadership
Management Practices
Performance
Performance
Fleishman, 1953
Weiner & Mahoney, 1981
Smith, Carson, & Alexander,
1984
Culture System (policies)
Performance
Kerr & Slocum, 1987
Denison, 1990
Management
Practices
Climate
Climate
Schneider, 1980
Schneider & Bowen, 1985
Structure
Climate
Climate
Schneider & Snyder, 1975
Joyce & Slocum, 1984
Systems Individual Needs &
Values
Jordan, 1986
Climate Motivation -
Performance
Rosenberg & Rosenstein, 1980
Skills/Job Match Motivation -
Performance
Hunter & Schmidt, 1982
Individual Needs
& Values
Motivation -
Performance
Guzzo, Jette, & Katzell, 1985

The methodology and findings from each of the studies are discussed in the following pages
under the variable headings represented in the B-L Model.
33
External Environment

As early as the mid 1960s, Emery and Trist (1965) and Katz & Kahn (1978) speculate that the
external environment of the organization has an impact on the internal organization. They
characterize the external environment as dynamic (i.e., constantly changing). According to
open systems theory, the organization responds to the demands of the external environment
in which it operates. Hence, Burke and Litwin include the external environment as an
important variable in the B-L Model.

Two empirical studies are reviewed on the impact of the external environment on organization
behavior. In the first study, Gordon (in Kilmann, Saxton, Serpa, & Associates, 1985) examines
the impact of the external environment on the culture of different types of organizations. He
compares utility companies, which operate in a more stable external environment, to high
technology manufacturing companies, which operate in a dynamic external environment.
Gordon has found that the companies operating in dynamic external environments places
higher value on initiative (i.e., freedom to act, innovation, and risk taking) and
organizational reach (i.e., setting aggressive organizational goals) than companies operating
in stable environments. In summary, Gordon has found that organizations affected by the
external environment develop cultural patterns to meet environmental demands.

In a second study on the external environment of organizations, Prescott (1986) examines
organizational strategy and performance. This researcher has used a pre-existing database of
data from over 1,500 business units collected during 1978-81. Prescott has found that
business strategy significantly influences performance, with the external environment
moderating the effects of strategy on performance. The relationship found between the
variables is as follows:

Figure 15
Variables in Prescotts (1986) Study
External Environment
Strategy Performance

As the figure illustrates, the external environment serves as a moderating variable in this case.
A moderator variable is a variable which affects the direction and/or strength of the
relationship between two other variables.

34
Leadership
Three studies are related to the construct of leadership in the B-L Model. As an early study,
Fleishman (1953) has evaluated the effects of leadership training on management practices in
a vehicle production plant. Fleishman has found that leadership attitudes and behavior do not
operate in isolation; rather, the social environment of the plant in which the leader works is
found to be an important variable related to leader behavior and the effectiveness of
leadership training. These findings suggest that leadership, whether training or pre-existing
attitudes and behavior, do impact management practice, with the organizational culture
serving as a moderating variable.

In a later longitudinal study, Weiner and Mahoney (1981) examine the leadership practices of
193 manufacturing companies from a pre-existing database of company data. They have found
that leadership affects two factors related to organizational performance: company
profitability and stock prices. They conclude that leadership is important to the performance of
an organization.

In a second longitudinal study examining the same two variables, Smith, Carson and Alexander
(1984) have also found that effective leadership is associated with improved organizational
performance. Interestingly, this study employs a sample of 50 church ministers. Within this
type of organization, effective leaders impact the following indicators of organizational
performance: church membership growth, property development, and greater membership
giving (i.e., donations to the church). In addition to providing support for the relationship
between leadership and performance, this study illustrates the importance of studying
different types of organizations and not merely corporate entities.

Culture
A study by Kerr and Slocum (1987) examine the association between reward systems of diverse
industries (e.g., aluminum, machine tools, pharmaceuticals, food products) and corporate
culture. The type of reward system in place in any given organization has to do with the salary,
bonuses, stock options, and promotions available; Burke and Litwin include such reward
systems in their systems variable. To study this association, these researchers have interviewed
eighty executives and upper-lever managers. The interview questions are related to the
performance appraisal process in the company, the reward systems, and the culture of the
company. The open-ended interview questions related to organizational cultural pertain to the
history of the company, the founders or dominant leaders, and traditions, values, and norms of
the work culture. Kerr and Slocum describe the different reward systems they have found and
the associated organizational cultural values and norms. Again, not all levels of organizational
members are included in Kerr and Slocums study. Their sample includes executives and high-
level managers. Hence, specific types of reward systems for executives are associated with
certain corporate cultures.

35
Denison (1990) has conducted a comparative study of 34 firms in diverse industries (e.g.,
airline, utility company, medical equipment production). He has examined characteristics of
organizational culture in these firms and tracked their financial performance over time.
Although Denison has found that organizational culture is correlated with financial
performance, some of his measurement indicators differ in the strength of the relationship
between culture and performance. For example, decision making and work design (i.e.,
indicators of organizational culture) are associated with long-term financial performance
whereas supervisory leadership was more associated with short-term financial performance.


Schneider has conducted two studies related to management practices and service climate. In
the first, Schneider (1980) surveys customers and employees of 23 bank branches by mail.
Schneider has found that employees perceptions of climate are positively correlated with
customers perceptions of climate. Further, when employees perceive a strong service
orientation from their management, the customers of these branches report receiving superior
service. In explaining these findings, Schneider concludes that management practices which
emphasize a strong service orientation create a positive overall climate for employees as well
as customers.

Schneider and Bowen (1985) replicate their findings in their second study with a similar, but
somewhat larger sample of 28 bank branches. In this study, they include questions on the
survey which assess human resources practices under the broad area of management
practices. Again, they have found a positive correlation between employees perceptions of
human resources practices and customers perceptions of service climate. Schneider and
Bowen conclude that human resources practices can influence service climate. To summarize,
Schneider (1980) and Schneider and Bowen (1985) provide some evidence of the following
relationships:

Figure 16
Variables in Schneider & Bowens (1980, 1986) Study
related to a service quality

including human resources
practices
Climate
Climate

36
Structure
Schneider and Snyder (1975) have employed a sample of 522 employees (e.g., managers,
secretaries, insurance agents) of 50 life insurance agencies in their study of the effects of
organizational structure (i.e., arrangement of functions and people). They have found that
individuals in the same job categories, i.e., those experiencing the same organizational
structure, agree in their perceptions of the climate of the organization. There is also a
correlation between job category and job satisfaction, although it is not as strong as the
relationship between structure and climate. The findings from this study suggest that
organizational structure is somewhat more likely to affect perceptions of organizational climate
than individual feelings of job satisfaction.

In a second study of organizational structure, Joyce and Slocum (1984) have studied 220
foreman in various departments of production and fabrication in three heavy-duty truck
manufacturing plants. They describe climates as representing learned environments for
those working within them; as such, climate is found to differ among work units, and, secondly,
climate is associated with structure.

Systems

Jordan (1986) examines the effects of various rewards systems on employees motivation.
Forty-eight health care technicians in a state government pilot program for children with
disabilities serve as the sample in this study. Jordan has found that the reward system of an
organization does affect employee motivation. In particular, monetary rewards which are
contingent upon performance are found to decrease employees intrinsic motivation in this
study. Burke and Litwin (1992) note that the relationship between rewards and behavior in the
workplace is not as straightforward as one might expect. Whether in a positive or negative
manner, the reward structure does affect employees motivation in Jordans study. In another
study conducted by Hammer (1988), worker participation combined with a pay for
performance reward structure resulted in increased productivity (i.e., performance).

Climate

Rosenberg and Rosenstein (1980) implemented a program over a period of six years (1969-75)
in a medium sized plumbing manufacturing company to examine the effect of worker
participation on productivity. The program involved employee participation activities (e.g.,
representation in meetings, participative decision making). In this study, worker participation
actually fit Burke and Litwins description of work unit climate. Rosenberg and Rosenstein have
found that worker participation (i.e., work unit climate) does influence performance. These
researchers have also examined the effects of adding a monetary reward within the worker
participation program. This motivator does influence performance, although work unit climate
remains a more influential factor in influencing performance.
37
Skills/ Job Match
Hunter and Schmidt (1982, in Campbell, Campbell, & Associates, 1988) have examined the
selection criteria used in hiring individuals for specific positions (i.e., person-job match) across
industries in a national study. These researchers conclude that the manner in which individuals
are fitted to their respective jobs has a significant impact on organizational performance.
Interestingly, they postulate that improvements in the use of personnel assignment strategies
namely the use of multivariate statistical selection models could lead to substantial impacts
on organizational productivity (i.e., performance) at the national level.

Individual Needs and Values
In their classic book on work redesign, Hackman and Oldham (1980) have emphasized the
importance of restructuring jobs to take into account individual differences between people.
Expanding upon the notion of work redesign, Hackman and Oldham (1980) suggest that
individuals have a need for growth and development on the job and should be motivated by
job enrichment interventions. Along these lines, Guzzo, Jette, and Katzell (1985) have
conducted a study on the effects of psychological interventions on worker productivity (i.e.,
performance). In a meta-analysis of 207 productivity experiments published during the period
of 1971-81, Guzzo et. al. (1985) have examined work redesign intervention programs. They
have found that intervention programs have a significant impact on worker interest,
motivation, and performance.

Other Relationships Among Constructs

Not all of the twelve variables in the B-L Model are included in Table H. This omission is not
intentional; rather, studies related to omitted variables are not available to date. Given the
relatively recent conceptualization of the B-L Model, such empirical studies should be
forthcoming. Burke and Litwin acknowledge that the nature of some of the relationships
among variables in the model are hypothesized to exist based on their OD practice and
experience.

It is evident that the B-L Model was conceptualized from theoretical and empirical literature on
organizational behavior. While the studies are varied in terms of their purposes,
methodological approach, the specific variables examined, and the operationalization of these
variables, as a whole, these studies provide tentative support for the relationships among the
constructs in the B-L Model.
38
Organizational Intelligence Model

The final model introduced and described here is a relatively newer model, namely the
Organizational Intelligence Model, which was developed by Falletta in 2004 and later refined
and published in 2008. This model includes several elements which are similar to the B-L model
as well as additional key factors and indices that drive employee engagement and
performance.

The Organizational Intelligence Model can serve as a diagnostic framework for OD purposes as
well as to facilitate the design and interpretation of most employee and organizational survey
efforts. In total, the model includes 11 factors and variables (see Figure 17 below and Table H).

Figure 17

39
Table H
Factor Descriptions of the Organizational Intelligence Model
Environmental
Inputs
The outside conditions or situations that affect the company/organization
(e.g., Sarbanes-Oxley, government policy, competitive intelligence, customer
feedback, the economy).
Strategy The means by which the company/organization intends on achieving its
overall mission and goals and creating value for its stakeholders.
Leadership The most senior level of executives and managers in the
company/organization.
Culture The underlying values, beliefs, myths, traditions, and norms that guide team
and organizational behavior.
Structure &
Adaptability
The structure is how the company/organization is designed (i.e., levels,
roles, decision rights, responsibilities and accountabilities) to execute on the
strategy. Whereas, adaptability refers to the extent to which the
company/organization is ready and able to change.
Information &
Technology
The business systems, practices, and capabilities that facilitate and reinforce
peoples work (e.g., IT infrastructure, communication, knowledge sharing).
Direct Manager The relative quality and effectiveness of an employees immediate manager
or supervisor.
Measures &
Rewards
Measures refer to the ways in which individual and team performance and
accomplishments are measured and managed. Rewards are the monetary
and non-monetary incentives that reinforce people's behavior and actions,
including advancement and promotion.
Growth &
Development
The practices, resources, and opportunities available for employee skill
development and enhancement, including development planning, training
and learning, and stretch assignments.
Employee
Engagement
Employee engagement involves the cognitive, emotional and behavioral
relationship employees have with their jobs and organizations, and effort
and enthusiasm they put into their daily work (i.e., the extent to which
employees exert their discretionary energy and effort on behalf of the
organizations they serve).
Performance
Outputs
The outcomes and indicators of individual and organizational achievement
and results.
40

Measuring Employee Engagement (Excerpt from Falletta, 2008)

For decades, traditional employee satisfaction models and measures were the norm. These
diagnostics tools were lengthy employee opinion questionnaires (100 to 150 items) that
attempted to measure job satisfaction and general satisfaction with organizational-
sponsored programsthe extent to which employees were satisfied with various programs,
benefits, and services. By the early 1990s, more targeted employee pulse surveys began to
emerge. These were typically administered on a quarterly or biannual basis. They measured
employee perceptions and reactions to organizational change efforts and popular
management trends, such as quality management initiatives, restructuring, and system
implementations.
The dot-com era from roughly 1995 to 2000, coupled with the war for talent, ushered in the
concept of employee engagement. This led to the development and validation of a number of
branded and competing definitions of engagement, survey instruments, and concomitant
items and questions by consulting firms and research consortia and think tanks.
Unfortunately, these varying definitions and measurement tools limited the extent to which
research on employee engagement can be generalized beyond specific firms practices.
Moreover, many of the survey instruments available comprise merely a few items related to
employee motivation, commitment, and retention. They omit important strategic levers and
primary drivers that ultimately affect employee engagement. Hence, the lack of a standard
definition and reliable measurement tools has left practitioners dazed and confused as to
what employee engagement actually is, and how to accurately measure it.
Survey consultants and practitioners are continuing to extol the value of employee
engagement. However, the means of measuring and demonstrating its impact continues to
lag behind. A comprehensive approach for measuring employee engagement at the
cognitive, affective, and behavioral levels is sorely needed. Cognitive engagement refers to
what employees thinktheir rational commitment to and beliefs about the organization.
Engagement, at the affective level, refers to how employees feel about their organizations
their emotional attachment and connection to their jobs, direct managers, co-workers, and
the organization. The behavioral domain refers to how employees actthe discretionary
energy and effort employees exert on behalf of the organizations they serve.
Surveys based on the Organizational Intelligence Model measure employee engagement at
each of these levels and more. They are broader than employee engagement surveys, yet
concise and more focused than antiquated employee satisfaction surveys.

Like the B-L Model, the Organizational Intelligence Model depicts a top-down causal chain,
making some tentative assertions with respect to cause and effect. The variables in the upper
part of the model (such as environmental inputs) affect the organization from the outside.
Within the organization, the strategic drivers (e.g., leadership, strategy, and culture) affect key
indices that represent organizational climate, capability, and execution. These include the
41
organizations structure and adaptability, effectiveness and quality of the direct manager, and
rewards and growth opportunities, among other factors. These latter internal factors in turn
influence employee engagement and performance. While the Organizational Intelligence
Model is similar to the B-L model in many respects, it differs in the following ways.
1. The Organizational Intelligence Model depicts and emphasizes the notion of employee
engagement which goes beyond employee motivation and commitment.
2. The Organizational Intelligence Model depicts and emphasizes growth and development
as a key factor for engaging and retaining talent.
3. The Organizational Intelligence Model has been tested in a number of settings with
respect to validity and reliability vis--vis factor analysis and causal modeling
procedures.

Burke and Litwin (1992) and Falletta (2008) wisely call for validation of their respective models
through further empirical investigation and causal modeling in multiple settings in terms of
generalizability. Causal modeling procedures used in organizational behavior research is the
focus of the next section of this review.

Causal Modeling in Organizational Behavior Research
The Burke-Litwin Model of Organizational Performance and Change (B-L Model) is a
representation of an organization, as discussed earlier. In pictorial form, the model is termed a
path diagram because it depicts a network of relationships among variables (Hunter & Gerbing,
1982). Once a model such as the B-L Model has been hypothesized from the theoretical
literature, causal modeling procedures can be used to test the validity of the model. Causal
modeling procedures can estimate both the direction of the relationships between variables
and the magnitude of those relationships (Williams & James in Greenberg, 1994). Two common
statistical procedures used for such purposes are path analysis and structural equations
modeling (SEM).

Path Analysis

Path analysis is a statistical procedure employing multiple regression techniques in the analysis
of a path diagram (Williams & James in Greenberg, 1994). This technique was invented by a
biostatistician, Sewall Wright, in 1918 (in Bollen, 1989). Path analysis provides more
information than is available from performing simple correlations between variables (Gable &
Wolf, 1993). In path analysis, the researcher must specify both the independent and
dependent variables and the direction of the effect between the variables. The direction of the
effect can be one-way, or directional (i.e., nonrecursive), only. Two of the assumptions which
must be met in order to apply simple path analytic procedures are fairly restrictive; these
include the premise that no measurement error may exist and that the path represents a one-
way, directional flow between variables (Bollen, 1989; Bollen & Long, 1993).
42
SEM

SEM goes beyond classical path analysis and is less restrictive in the assumptions which must
be met in order to use the statistical procedure (Gable & Wolf, 1993; Williams & James in
Greenberg, 1994). While SEM is more difficult to run and interpret than simple path analysis, it
is often preferred over path analysis (Gable & Wolf, 1993). The technique was developed in the
1960s from an integration of econometric and psychometric methods; the approach combines
both structural equations from economics and factor analytic techniques from psychology. One
purpose of SEM is to determine whether a pattern of relationships in data matches the
predictions in a hypothesized model (Gable & Wolf, 1993). Hence, SEM can be used to
determine whether an organizational diagnostic model is valid.

As distinct from simple path analysis, SEM requires that a distinction be made between
theoretical constructs and measurement indicators (Hunter & Gerbing, 1982). The theoretical
constructs in a model are the latent variables (see Table I) which are hypothesized to exist from
a review of the research literature. In contrast, the measurement indicator (often an item on a
survey instrument) is termed the manifest variable. The behavior of a latent variable can be
observed or measured only indirectly, though its effects on a manifest variable. The manifest
variable is also termed an observed variable because it can be directly measured. Key features
of SEM include the following:

1. Both manifest and latent variables can be measured.
2. Estimates of factor loadings, which indicate the influence of latent variables
on manifest variables, are calculated.
3. Estimates of the error variance within manifest variables are calculated.
Table I
Definitions of Variables
Definition of Manifest and Latent Variables
Variable
Type
Definition Synonymous Terms
Manifest
Variable
An observed variable
that measures a latent
variable
Items, tests, scales, indicators,
proxies, overt variables, fallible
measures, molecular variables
Latent
Variables
A hypothesized
theoretical construct
Traits, true scores, domain scores,
universe scores, unobserved
variables, underlying variables,
factors, constructs, and molar
variables
Note. Hunter & Gerbing, 1982
43
This means that SEM simultaneously estimates the relationships between the indicators and
the constructs. The degree of the relationships is apparent through the factor loadings. Unlike
path analysis, the error variance in the indicators is also calculated. That is, SEM accounts for
random measurement error where the assumptions of path analysis do not allow for any
measurement error.

Williams and James provide guidance for improving the use of SEM (in Greenberg, 1994). They
provide recommendations for researchers applying the technique and suggest that it is good
practice to:
Satisfy the conditions for confirmatory analysis
Give a priori consideration to alternative models
Use a measurement tool with high reliability
Accept a probability of p < .05 for confirming paths predicted to be zero and
for paths predicted to be nonzero
Cross validate the model
To satisfy the conditions for the confirmatory analysis of the relationships in the path diagram,
it is important to (1) specify the direction of all of the relationships in the path diagram, (2)
determine whether these relationships are reciprocal or not, and (3) ensure that all variables
have been included in the model. The purpose in considering other models in addition to the
model being tested is to insure that a second model, similar to the model being tested, is not a
better fit. These authors also discuss the inherent weakness in modifying a model post hoc,
that is, after the analysis; they suggest that such modification is not grounded in a theoretical
basis. Hence, they stress the importance of initially grounding the model to be tested in
empirical research.

The measurement instrument, often a survey of organizational members, should also be high
in reliability; instruments with relative low reliability have inherently more measurement error.
Good practice also suggests assigning a predicted value of zero (i.e., no relationship) and
nonzero (i.e., relationship) to paths in the path diagram. This way, a significance test,
employing a probability of p < .05, can be used to accept or reject the predicted hypotheses. In
the past, researchers have reported only the degree of correlation, without using a test of
significance. Finally, the research should be published with cross validation by other
researchers encouraged in order to assess the model in other contexts and, hence, the
generalizability of the model.

The application of SEM has increased dramatically in organizational research over the past
twenty years (Williams & James in Greenberg, 1994). In a review of data analytic procedures
used in organizational research during 1975-1993, the use of SEM has increased, while the use
of path analysis has decreased markedly (Stone-Romero, Weaver, & Glenar, 1995). For years,
the computer program Linear Structural Relations (LISREL) has been the standard in the field
for performing SEM (Bollen, 1989, Hatcher, 1994). However, SEM is now more widely available
within a variety of statistical packages, including PROC CALIS in SAS, EQS, and AMOS, to name a
few (Hatcher, 1994).
44
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47
Dr. Salvatore Falletta
Biographical Sketch

Dr. Salvatore Falletta has over 20 years experience in management, human resources, training
and performance improvement, and organization development. Sal is an Associate Professor
and Associate Program Director for Human Resource Development at Drexel University. He is
also President and CEO of Leadersphere, Inc a HR intelligence consulting firm that specializes
in employee and organizational surveys, 360 degree feedback systems, measurement and
evaluation processes, general HR strategy, employee engagement, and OD consulting.

Prior to Drexel and Leadersphere, Sal was Vice President and Chief HR Officer for a Fortune
1000 company based in the Silicon Valley, California and has held management and consulting
positions in human resources at several best-in-class companies, including Nortel Networks,
Alltel, Intel Corporation, SAP AG, and Sun Microsystems. While at Intel, Sal managed the global
employee survey program, performed leadership development needs assessments and
organizational behavior research studies, and participated in corporate HR strategy efforts. He
also led the training measurement and evaluation function at Nortel Networks Technical
Education Centers

Sal is an accomplished speaker, researcher, and author. He frequently presents at conferences
and seminars and has co-authored the Targeted Evaluation Process (ASTD Press, 2000), a book
chapter on employee and organizational surveys in Organization Development: Data Driven
Methods for Change, (Jossey-Bass, 2001), and several other book chapters and articles
including a recent feature article on Organizational Intelligence Surveys for Training &
Development (June 2008). He is currently writing a book on Workforce and HR Intelligence
practices among Fortune 1000 firms and the Handbook for HRD Evaluation (forthcoming). Sal
holds a doctoral degree with a specialization in human resource development from North
Carolina State University. He also studied epistemology, science, and reason at Oxford
University and received global HR certification (GPHR) through SHRM.

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